Question

question 13,14,15,16

13. Which of the following is not an asset use transaction? A.Paying cash dividends B. Paying cash expenses C. Paying off the principal of a loan D.Paying cash to purchase land 14. Which of the following cash transactions results in no net change in assets? A.Borrowing cash from a bank B. Issuing common stock for cash C. Purchasing land for cash D. Providing services for cash 15. Elektra Company purchases equipment for $1,200 and supplies for $400 from Miller Co. for $1,600 cash. The entry for this transaction will include a A. Debit to Equipment $1,200 and a debit to Supplies Expense $400 for Miller. B. Credit to Cash for Miller. C. Credit to Accounts Payable for Elektra. Debit to Fauinment $1200 and a debit to

Answer 1

1) purchasing land for cash

Asset use transactions or events are those that reduce total assets.purchasing of land for cash will not reduce the total asset.the cash decreased from current asset will be increased in fixed asset value.therefore the total asset will be same before and after transaction.

paying cash dividend,paying cash expenses and paying off the principal amount of a loan will reduce the cash as it will reduce the total asset.

2) purchasing land for cash

asset=fixed asset+current asset

purchasing land for cash will not make any net change in the asset value, the cash decreased from current asset will be increased in fixed asset value.

borrowing cash from bank increases the cash(current asset) and increases the liability.there will be a change in asset

issuing common stock for cash increases the current asset and increases the equity section. as the current asset increases asset also increases.

providing services for cash increases current asset and increases the retained earnigs.as the current asset increases asset also increases.

3)

debit to equipment $1200, and debit to supplies $400 for elektra

credit to cash for miller

the purchase of equipment and supplies of elektra company for cash from millre company

equipment and supplies are asset for elektra company which should be debited when it increases and the cash paid for miller company cash is an asset account which should be credited when it decreases

4) income statement account and one balance sheet account

Each adjusting entry has a dual purpose: (1) to make the income statement report the proper revenue or expense and (2) to make the balance sheet report the proper asset or liability. Thus, every adjusting entry affects at least one income statement account and one balance sheet account.